USD/RUB Analysis and Predictions for 2016

For more than one year ago, Russian Ruble
suffered from fluctuations that caused traders to go short on USD/RUB, while
brokers did their trick by increasing swap values on currency pairs that
included ruble, and by limiting leverage on such pairs.

USDRUB 1-year Chart

Initially, fluctuations were around 30-36 rubles
per dollar, but in the beginning of December it went to nearly 80 rubles per
dollar. Those fluctuations were partly resulting from political events in the
Eastern part of Ukraine and trade embargo that was imposed on Russia.

Along with Forex trading, there are other
commodities that are being traded as well. It is well-know that Russia is the
second largest producer of oil and on the 3rd place in oil import.
With all that, USD/RUB rate highly correlates with the price of oil.

There is a strong negative correlation between
USD/RUB and WTI prices. Negative correlation means that lower the price of oil
gets, the more rubles will be paid per dollar.

There is another commodity in Russia that is
strongly correlated, and that is also important for Russia’s economy – naturalgas. The price of natural gas is experiencing downfall as well.

Interventions

Interventions made by Russian
Government influence the
prices of USD/RUB to the high extent. If you have observed closely, the value
of USD/RUB was falling during the first quarter of 2015. At that point, USD/RUB
moved from 70 rubles per dollar to just about 50.

Impact on foreign trades

When the price of a country’s currency decreases,
that means that country is not importing goods for higher prices, so from there
it goes logically – it becomes more profitable to export goods. At this moment,
Russia has a very strong trading profile due to its export which is greater
than the import. However, Turkey, as one link in that chain, has always been
important trading partner for Russia, but since the latest developments in
politics, it is possible that this relationship will deteriorate.

Predictions for 2016

If you wish to
invest in Forex, USD/RUB presents a viable option as volatility was quite high
in 2015 and this pair should show great results for a relatively short time.
According to our predictions, the price of oil will drop further and the same
applies to the natural gas prices, which will also drop, and that should
trigger the drop of USD/RUB correspondingly, to around 80 rubles per dollar.
This level should be watched carefully, because such rate could also trigger
another intervention from the Russian Government. Therefore, it is suggested to
go short on USD/RUB after the price has passed 82 rubles per USD.

Even though technical analysis is important in day trading, you should not
totally rely on it when trading any currency pair that includes RUB in it.

It would be wise to pay attention to fundamental
events, because they can contribute to the changes in the rate of ruble.
Analyze all the important events and watch for the indicators that can warn you
of possible changes in trend.

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.